Communicating During a Crisis – The Pepsi Syringe Scare

Details

Case Code : CLMC-039
Publication date : 2005
Subject : Marketing Communications
Industry : -
Length : 04 Pages
Price : Rs. 100

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Key words:

FDA, Video News Releases, Craig Weatherup, PepsiCo, Contamination, Diet Pepsi, Employee Bulletins, Crisis Management Team, ABC Network, David Kessler, FBI, Company’s Image, Media relations managers and Communication center.

Note

1: This caselet is intended for use only in class discussions.
2: More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 

Abstract:

The caselet examines the syringe scare that Pepsi faced in 1993. The caselet elaborates on the measures taken by Pepsi’s crisis management team to overcome the crisis. The caselet also provides details on how the company effectively used the television and print media to communicate with concerned groups and stakeholders. The caselet gives insights into how Pepsi closely worked and cooperated with the FDA to identify the root cause of the crisis and maintain a positive corporate image.

Issues:   » Importance of an effective crisis communications plan   » Steps to implement a public relations strategy   » Use of mass media in crisis management   » Regulatory issues in marketing beverages Introduction In 1993, PepsiCo (Pepsi), the leading beverage company in the world, faced a crisis in the US market, which could have put the future of the company and its brand Diet Pepsi in jeopardy. On July 10, a Seattle TV channel reported that a man and his wife in Tacoma, Washington, had found a syringe in a can of Diet Pepsi.

This was soon followed by a spate of reports that claimed that consumers had found objects such as a wood screw, a bullet, a cracked vial, and a broken sewing needle in the Diet Pepsi cans. Within no time, 52 such cases were reported from 23 states in the US.

Questions for Discussion:

1. The contamination issue that could have snowballed into a major crisis for Pepsi subsided in a mere week, with limited damage in terms of sales and company image. Industry experts attributed this to the effective crisis communication plan of Pepsi. What kind of steps did Pepsi take to overcome the syringe scare crisis and were they the correct ones?

2. Pepsi took the aid of different media to implement its crisis communication plan and also to communicate with the concerned groups. What role did television and VNRs play in effectively communicating Pepsi’s stand and mitigating the nationwide panic?